The Chinese government has made some policy changes on importing/exporting trade of raw hides and tax rebate of some items of finished leathers. As those policies are very complex, for easy understanding, the CLIA have summarised them and translated them into English:
The government of China has published various circulars since December 2005 to make adjustments to its import/export tax system regarding hides and skins, semi-finished leather and finished leather.
1. Adjustment of collection of the customs duty and VAT
a. The importation of raw hides and skins (HTS4101-4103), where the inputs are subsequently converted to semi-finished leather (HTS4104-4106) or finished leather (HTS4107, 4112-4115) and re-exported, must be subject to the normal customs duty and VAT of 17%. Namely, the importers must pay the customs duty and the VAT on the importation of these items.
b. The importation of raw hides and skins (HTS4101-4103), where the inputs are subsequently converted to leather products (shoes, bags, leather garments etc) and re-exported: customs duty and VAT free. This is scheduled to expire on December 31, 2008.
c. The importation of raw fur skins (HTS4301), semi-finished leather (HTS4104-4106) and finished leather (HTS4107, 4112-4115), where the inputs are subsequently converted to finished leather or leather products (shoes, bags, leather garments etc): customs duty and VAT free.
2. Adjustment of VAT rebate on some raw hides and skins, semi-finished leather and finished leather
The China government authorities have made some changes in the VAT rebate percentages on the exportation of certain raw hides and skins, semi-finished leathers and finished leathers.
Products with the cancellation of export tax rebate
4101-4103 Raw hide
4104-4106 Semi-finished leather (wet-blue, crust leather etc)
4301 Raw fur skin
41071120 Tanned full-grain unsplit whole horse hide
41071220 Tanned grain split whole piece of horse hide
41071910 Tanned whole horse hide for machine belt use
41071990 Other tanned whole cow and horse hides
41079100 Tanned full-grain unsplit piecemeal cow and horse hides
41079910 Tanned piecemeal cow and horse hides for machine belt use
41079990 Other tanned piecemeal cow and horse hides
41133000 Tanned further processed hairless reptile skins (hides)
41139000 Other tanned further processed hairless reptile skins (hides)
41141000 Oil-tanned hides
41142000 Coated and laminated hides, metallic-plated hides
41151000 Reconstituted hides based on hides or the fabric of hides
41152000 Leftover bits and pieces of hide or reconstructed hide; hide powder.
Products with a lowering export tax rebate to 8%
41071110 Tanned full-grain unsplit whole cowhide
41071210 Tanned grain split of cowhide
41079200 Tanned grain split piecemeal cow and horse hides
41120000 Tanned further processed hairless sheep or lamb skins
41131000 Tanned further processed hairless goat or small goat hides
41132000 Tanned further processed hairless pigskins.